Monday, December 21, 2009

Facts of the Day About Detroit

1. Detroit Mayor Dave Bing in the WSJ: "Today in the city of Detroit, our union employee benefits cost 68% of what their base wage is. I don't think that happens in any other place in the country." To give a sense of how excessive those pay packages are, he adds, "When you look at one of the most dominant labor unions in the world, the UAW, they're nowhere close to what we give our city workers."2. Mayor Bing grumbles that there are 17 unions with over 50 separate bargaining units. "I can give you a data sheet that will show you we've got several of those bargaining units with fewer than 100 people, and each one of them has a president who is paid by the city to negotiate against the city," he says. "Coming from the private sector, I find that insane." 3. According to the U.S. Census Bureau, Detroit ranks #1 as the city with the highest percentage of people living below the poverty level at 32.5%.4. According to the Michigan Association of Realtors, the average sale price of a home in Detroit (YTD through October) is $12,342.

Mayor Dave Bing of Detroit is suffering from the Jennifer Granholm Virus. It’s a Virus that generates screaming in TV interviews regarding Stimulus Plans and the need for Bail Out money. It is accompanied by 25% Real Unemployment Rate.

The CDC states they are working on a Vaccine, but the Granholm Virus is extremely difficult to eradicate through Fiscal Restraint due to the Virus being Bail Out Prone.

I wonder what Detroit would look like if our federal government had poured $200 billion a year into our indsutrial economy, instead of our rural economy.Imagine a Department of Manufacturing, that ran thousands of "manufacturing extensions" across the country to help manufacturers, and if colleges had taxpayer financed "mechanical schools." Imagine if the federal government paid manufactuers not to produce.Imagine if we siphoned money out of rural areas and pumped it into urban areas, to the tune of $200 billion a year, instead of vice versa.People cite US agriculture as the pinnacle of global farming--and it is heavily guided, supported and subsidized by the federal government. I can think of no sector so utterly enmeshed into our federal government. Let's try to support manufacturing for the next 20 years, and wipe out the Department of Agriculture. Detroit might yet bloom again. Land is cheap there.Maybe Dr. Perry could even get a job in the private secctor.

"If Mayor Bing would like to have an amalgamated union, he should propose that to the union leaders and schedule an NLRA election to create a super union in Detroit."

What Mayor Bing would like is what's best for the city and for its citizens - no blood sucking unions which impoverish the tax payers of Detroit and chase productive resources to outside of the city limits. Public unions are as great a drain on society as are those in the private sector...perhaps even more so since the government has less incentive to shrug them off than do businesses.

Who were the mayors who negotiated those contracts? At 68% fringe benefits, which is very highly unusal, they or their cronies were probably getting a cut. Did they get paroled yet? Isn't Mayor Bing also violating a court order to withhold union dues from paychecks? What's the normal penalty for that? Let one of us defy a judge and we would find out real quick.

If the mayor wants to change the National Labor Relations Act, he should run for Congress and change the law and not hold himself above the law and break it. He could easily end up in jail like his predecessor. Doesn’t Detroit have enough problems with its image without that?

Your argument seems to be premised on a belief that subsidies somehow work. Subsidies actually distort markets and keep price signals from directing the activities of millions of people.

Your prescription for manufacturing has been tried before...ever hear of the Big 3. Of the 3, only Ford is viable. Subsidies have kept the Big 3 from making the kinds of decisions necessary to ensure continued competitiveness. Investing in a business which cannot attract private investment is putting good money after bad by propping up the weakest players. A company should have to attract capital by demonstrating its ability to compete successfully and provide a return on investment. No free lunch.

Perhaps, the answer is to scrap subsidies and government stickhandling unless the circumstances are exceptional ie. a major series of bank runs, currency collapse, international banking crisis, etc.

A great many people make the same assumption which I believe is due to the education system. Certain ideas have been so wonderfully inculcated into students ie. government as the answer to all problems, that it is quite difficult to see things from other perspectives.

Just a theory of course but it's interesting how one will see Diane Francis, a fiscal conservative, write in support of a global one-child policy similar to China's. Apparently, even Diane Francis is not familiar with the history of population control in particular, the human rights violations in India. The worst of these included forced sterilizations for men as old as 80 and forced abortions with no follow-up medical care.